DOVER — Residents of manufactured-housing communities may see strengthened rent protection after legislation passed in the state Senate prior to the General Assembly’s two-week recess.

Senate Substitution 1 for Senate Bill 9 would also reduce the number of disputes for residents, set clear limits on rent increases, bolster enforcement of health and safety standards, and expand eligibility requirements for rent-assistance programs.

The bill’s primary sponsor is Sen. Jack Walsh, D-Stanton, and it received additional sponsorship from Senate Majority Leader Bryan Townsend, D-Newark; House Majority Leader Valerie Longhurst, D-Bear; and Rep. Paul Baumbach, D-Newark.

Supporters of the proposal contend that current state law gives residents of manufactured-housing communities inadequate protection from rent increases. Oftentimes, this results in disputes between residents and community owners, which can lead to arbitration hearings and legal fees.

The proposed legislation would affect occupants of approximately 31,086 manufactured homes in Delaware, according to the 2017 U.S. Census Bureau’s American Community Survey, which adds that such homes account for 11% of the total housing stock in Kent County and 12.9% in Sussex County.

Sen. Walsh said it is time to create a fair system because of the impact large rent increases have on individuals in these neighborhoods.

“The residents of manufactured home communities are some of the most vulnerable constituents we represent,” he wrote in a House press release after the bill passed in the Senate on May 19. “They are often seniors on fixed incomes or families with limited means who have moved into these communities for the promise of relatively low housing costs.”

Sen. Walsh continued: “Unfortunately, that is often not the case due to a number of factors, including the fact that they are frequently hit with hefty increases in the rent they pay for the land that’s literally beneath their feet.”

SS 1 for SB 9 would tie single-year rent increases to the Consumer Price Index for All Urban Consumers (CPI-U), which measures the average change over time that urban consumers pay for a good or service. The bill would also protect residents from increases due to market pressure, requiring them to be phased in over the span of seven to 10 years based upon the size.

Though the legislation sets limits on rent surges, it exempts taxes, insurance and utility charges from those limits if such increases are communicated to residents. Also if properly communicated, rent hikes in concurrence with the proper CPI-U would be permitted if there have not been health or safety violations for more than 15 days; if the increase is related to operating, maintaining or improving the community; and if the increase is justified by capital improvements, changes in taxes, utility charges, insurance costs, operating and maintenance expenses, repairs and market rent.

Additionally, the bill closes a loophole in current state law that allows manufactured-housing community owners to increase rent for residents even if they fail to address health and safety violations. SS 1 for SB 9 requires the owner to provide a surety bond or letter of credit to fund the entirety of the rent increase, as well as documenting how the violation will be fixed. If the owner does not correct the violation by a specified date, the bond or letter of credit will be used to refund the rent increase to the resident.

The legislation would also expand manufactured-housing residents’ eligibility for the state’s lot rental-assistance program. The expansion allows those with median household incomes between 40% and 55% of their county’s average to apply for assistance. It would include an arbitrary residency date of 2006, so residents can reach the requirement of living in their homes for at least five years.

The push to protect these renters from harsh increases has been in the works for years, said Sen. Walsh, who thanked his Senate colleagues for supporting a “fair and predictable system for all parties.”

“This bill is the result of more than 8 years of discussion and negotiation between the Delaware Manufactured Home Relocation Authority, manufactured housing community owners, the Community Legal Aid Society and legislators,” Sen. Walsh said. “It’s not a silver bullet, but I believe it is the most significant progress we have made in some time.”

Rep. Baumbach also applauded the collaborative effort, stating that SS 1 for SB 9 is an example of Delaware’s legislature working at its best to serve those they represent.

“I commend Sen. Walsh and Sen. Townsend for taking the time to listen to and work with Delaware stakeholders, including the community owners, leaders, and residents, to find where common ground existed, where they could agree, and where they could negotiate. We can all recognize that SS 1 for SB 9 is a meaningful solution and step forward,” he said in the press release.

The act passed in the Senate by a vote of 19-1, with one not voting. The legislation will now be assigned to a committee in the House of Representatives for consideration.